Crowdfunding has become a social phenomenon in recent years – just look at the success of sites such as Kickstarter – and it is currently creeping into the property space.
The innovation of crowdfunding for property purchases is providing a way for potential investors to get into the market by lowering the barriers to entry.
Some say it’s just an extension of what already happens in the market place – whether it’s a couple buying their first home or a ‘crowd’ investing together.
Others say it is a high-risk, high-return phenomenon that will shake up the investment space.
Crowdfunding a property purchase enables investors to take shares (via an online platforms) in specific ventures or assets.
Effectively, it allows investors to pool money with other investors for an investment.
Property crowdfunding has taken off in the US, with $1.42 billion in investments registered.
If Australia follows after the US and Europe (where demand has exploded and more than $1 billion has been spent), crowdfunding property will take off as an investment channel… but is it all it’s cracked up to be?
Crowdfunding property is very high-risk, and as a relatively new property investing tool, it will be interesting to see how it plays out in the Australian market.
Thought property prices have gone up in recent years, you don’t need to fear you’ve missed the boat and crowdfund to afford the next ‘big thing’ you see.
Property fads come and go, but tried-and-true investment fundamentals will never go out of fashion.
A good strategy is the cornerstone of sound property investing and will provide you with solid long-term returns.
Real estate is fundamentally not a get-rich-quick scheme – it’s a long game.
Whether you decide crowdfunding is your thing or not, a clearly defined strategy will serve you well in all instances.
Don’t fall folly to fad investment strategies. If you’re looking for a way forward get in touch.
Call 1800 600 890 or email [email protected] // and get the advice you’re seeking.